From New York to Nkandla, shale gas is indeed a game-changer

JONATHAN DEAL

15 JUL 2014 01:19 (SOUTH AFRICA)

Shale gas has been hailed as a game changer worldwide, but many of the numbers being crunched are outdated – and the reality is a little more sobering. It’s worth picking up on US shale gas hype and bringing it down to earth in the Karoo.

Since 2011, there have been some incredible statements from oil and gas executives, but the uncontested winner must come from Chris Faulkner: “There is enough oil and gas underground (in America) to supply America for an almost endless amount of time.”

Shale gas has been hailed as a game changer worldwide, but many of the numbers being crunched are outdated – and the reality is a little more sobering. It’s worth picking up on US shale gas hype and bringing it down to earth in the Karoo.

Since 2011, there have been some incredible statements from oil and gas executives, but the uncontested winner must come from Chris Faulkner: “There is enough oil and gas underground (in America) to supply America for an almost endless amount of time.”

I met Faulkner, the soft-spoken CEO of Breitling Energy, when he presented on shale gas at a conference in Johannesburg. He was smartly dressed, self-assured and articulate. What I read in his interview with RIGZONE caused my jaw to drop open. RIGZONE’S Gene Lockard quizzed Faulkner on the recent decision by the New York Court of Appeals, in which the Court upheld lower court rulings, which allow municipalities to apply zoning ordinances to ban the practice of fracking within their borders.

Faulkner’s clanger, though, is nothing to do with the court decision but rather a statement that appeared later in the text. Responding to a question about how the ruling will affect drilling activity in New York State, Faulkner guesses that ‘drillers will go where the oil and gas is,” and elaborates: “As we’ve all seen, there’s enough oil and gas underground to supply America for an almost endless amount of time…”

Let’s rewind that. “Enough oil and gas underground to supply America for an almost endless amount of time.”

Consider President Obama on 25 Jan 2012: “We have a supply of natural gas that can last America nearly 100 years, and my administration will take every possible action to safely develop this energy.” President Obama has no doubt been misinformed by:

Aubrey McClendon, ex CEO of Chesapeake Energy, on CBS News’ 60 Minutes November 14 2010: “In the last few years we have discovered the equivalent of two Saudi Arabias of oil in the form of natural gas in the United States. Not one, but two.” Asked by talk show host Stahl: “We have twice as much natural gas in this country, is that what you are saying, than they have oil in Saudi Arabia?” McClendon responded, “I am trying very clearly to say exactly that.” To place McClendon’s Saudi Arabia claim in perspective, in 2011, the annual BP Statistical review of Saudi Arabia was 264.5 billion barrels of proven oil reserves as at the end of 2010 – when McClendon made his claim. This is the equivalent of 1587 tcf. of natural gas multiplied by two (as in two Saudi Arabias) and thus equals 3,174 tcf or enough to power the US at its current rate of consumption for approximately 125 years.

Also weighing in is the US Energy Information Administration (EIA). This body, largely responsible to US Congress for Energy forecasts, reduced Marcellus shale figures in Pennsylvania, in August 2011 from 410tcf to 84tcf after estimating reserves at 2tcf in 2002. During this time Professors Timothy Considine and Robert Watson of Penn State University, in what became known as the Penn State Report 2009 stated that “While reserve estimates… are somewhat uncertain at this early stage, estimates of recoverable reserves of at least 489 trillion cubic feet seem increasingly reasonable”.

The same report also predicted $35 billion in added value and almost 175,000 jobs in 2020. And well-known oil and gas advocate Daniel Yergin – Cambridge Energy Research Associates – predicted that world oil and natural gas liquids capacity could increase by as much as 25% by 2015, with Robert W Esser, director of CERA, asserting: “Peak Oil theory is garbage as far as we’re concerned.” Yergin in 2011 wrote in an article published by the Wall Street Journal that there is more than a 100-year supply of natural gas. It was also reported February 2014 by Moneynews that Yergin claims: “The emergence of shale gas and tight oil in the US demonstrates… how innovation can change the balance of global economic and political power.”

Reviewing the Zuma administration’s Shell-fed shale gas hype, I have to agree. Academic support for the shale gas boom was not far behind, although with a 50% caution, in the words of Professor Terry Engelder (Penn State University) who reported in the Fort Worth Basin Oil and Gas Journal (August 2009), that based on his own calculation, [there was]a 50% probability that the Marcellus would ultimately yield 489tcf.

The real numbers, especially through 2011-2013, reflect a markedly different trend. Between 2006 and 2011, Chesapeake sold whole or partial shale play interests for $17.9 billion, with the bulk of the sales being made to foreign buyers: Total, BP, Statoil and BHP Billiton. As reported later in this document, on those purchases BHP took a $2.84 billion write down, BP took a $2.1 billion write down, and in October 2013 Shell announced that they were selling up in Colorado and Texas, with outgoing Shell CEO Peter Voser telling Financial Times he regretted Shell’s huge bet on US Shale. And as a further example of industry exaggeration, shortly before selling Fayettville shale assets to BHP Billiton in Feb 2011 for $4.5 billion, Chesapeake claimed that EUR (estimated ultimate recovery per well) for Fayettville was up to 2.6bcf from 2.4 Bcf. But this claim is belied by an analysis of 4,258 wells in the Fayettville shale from January 2005 to July 2012 showing that only 1,116 (26%) have produced greater than one Bcf and only 86 wells (2%) have produced greater than two Bcf. This puts average cumulative production per well over 887 wells for Chesapeake/BHP in Fayettville at 719 MMcf – that’s 72.35% in the wrong direction. It’s little wonder that less than 18 months after acquiring Chesapeake’s Fayettville assets, BHP wrote off $2.84 billion – more than a 50% reduction from the purchase price. Is this what South Africa’s Public Investment Corporation (PIC’s) Dan Matlila is so keen to invest state pensions in? Matlila told Reuters in February 2014 that “[s]hale gas will be a game changer here and we will be the biggest investor.”

And in 2011, Cape Town, South Africa, the US hype was embraced by Professor Brian Kantor, at the time the chief economist and strategist for Investec Bank SA.Kantor, working on figures for South Africa of 485tcf (just in the Karoo basin), said: “Were this potential output of natural gas estimated as recoverable by the US EIA, to be captured from the Karoo shale, it would be very large potatoes indeed. It would be the equivalent to about 402 years of SA consumption of oil at current rates: 365*550 00 = 202.575m per annum; (83000mb/202.575mbpa) = 402 years.”

The 485tcf has subsequently been reduced to 390tcf, and now by South African scientists to just 40tcf. Alarmingly, the Econometrix report of Shell SA, at the time thoroughly trumpeted around South Africa by Shell and based on a percentage of 485tcf, has not been reduced 13 times. In 2013 Treasure Karoo Action Group published a peer-reviewed analysis of the Econometrix report by Professor Martin De Witt, which concluded, inter alia, that the [Econometrix] report falls short in many areas. Nor has Professor Kantor publicly reduced his 2011 forecast of 402 years of energy for SA. And in May 2014, shale proponents were shocked by the EIA revelation that it had in one fell swoop reduced the recoverable Californian Monterey shale reserves by 96%. This shale play had previously been described by energy analysts and shale proponents like Nick Greely in the UK as “… the star of the North American show … California shale will… reinvigorate the Golden State’s economy over the next two to three years.”

Meanwhile in South Africa, President Jacob Zuma, presumably referencing the same sources as Mr. Faulkner and the infamous Shell/Econometrix report, continues to label shale gas as a game changer for South Africa, even linking it to much-needed jobs. Mr. Zuma’s view on shale gas, as with many of his Cabinet Ministers, is just as outdated as the USGS estimates of 485tcf. In my view, our president is betting on a resource using figures that have been reduced 13 times. His stoic refusal to acknowledge global resistance to shale gas mining and the uncounted costs of shale mining to the environment and the taxpayer of this country, make it seem that he wants any news as long as its good. Shale gas may well be a game-changer, but there is a winner and a loser in every game – and I wonder if our president is backing the winning team. DM

Read the opening statement of SA law firm Webber Wentzel’s Pulane Kingston in a May 30 debate on national radio in South Africa. Kingston is a partner in the Oil and Gas practice of the firm. The debate motion (hosted jointly by WWF South Africa and SAFM – a national radio station), pitted two teams of ‘experts’ against one another. The formal motion was ‘FRACKING THREATENS OUR WATER RESOURCES’, and debaters were afforded 2 minutes for an opening statement.

Referencing ’emotional and alarmist statements’ [about shale gas] as something to avoid, Kingston embarked on an opening statement, that apart from failing even once to obliquely reference the debate motion, was materially inaccurate and curiously muddled for a legal professional and so-called expert on fracking. Basing her argument on obsolete figures of speculative shale gas reserves already slashed by South African scientists and referencing industry commissioned (Royal Dutch Shell) reports based on shale gas reserves 13 times greater than current best estimates, Kingston was apparently so taken with her calculation of 310 years of energy for South Africa out of speculated Karoo reserves that the issue of water, and the motion of the debate against which she was expected to argue, appeared to evaporate like a drop of water on a hot Karoo tin roof. A sober review of Kingston’s 310 year claim could be said by those with a more pragmatic approach to the speculative land of milk and honey, to earn first place in the joint categories of ’emotional and alarmist’. I have to conclude that if this position reflects the understanding and expertise of shale gas mining to be found in the top legal minds of South Africa, it demonstrates that the country is in a dire situation with regard to understanding the issues intrinsic to shale gas mining. A rigorous and structured follow-up debate with Kingston sans radio adverts, news reports and audience participation will be welcomed.

“Shale gas presents an incredible opportunity with tremendous economic benefits overall. In the context of the shale gas reserves total which are estimated at 390 tcfs, there are two points that I would like to make. The first is that in terms of energy security it is estimated that the reserves that are available can meet our energy requirements for the next 310 years. That is significant. Secondly, in the context of job creation, they would create at least 850,000 jobs according to a report by Econometrix. The second point I would like to make is that as responsible citizens in this country, we need to really move away from emotion and alarmist statements that ultimately detract from our ability to focus on the risks in a sober minded manner and to ensure that those risks are appropriately attended. It is incumbent of all of us to do this in order that we end up at a place that is the correct conclusion. To my mind the fundamental issue here lies in the government creating a regulating framework that ensures the success of fracking in the Karoo which is done in a sustainable and responsible manner. The definition here for me as well is that monitoring shale gas fracking is ultimately what is important and should be what we are focusing on at all times.”

Visiting the US and Europe last year to receive the Goldman Environmental Prize for AfricaI was struck by the lack of coordination amongst environmentally minded people (citizens) – on a global basis. The citizens of this planet need a central rallying point to communicate, share ideas, link to scientific and other data – a place where we can harness our collective strengths and resources – in a battle against the biggest, the most ruthless, the most determined corporates that have emerged since the Industrial Revolution and the advent of fossil fuels.

Launched in its infancy at a Goldman ceremony for the 2013 prize winners in Washington, April 2013, the idea of a global alliance has received support from most everyone polled. A proposed name (Global Citizens Alliance) with the strapline (for a sustainable planet) is being incorporated into a logo and will accompany a more formal launch.

In the meantime, here is a concept document – open to all citizens and sustainably minded organisations to comment. Comment from dissenting citizens and organisations is also welcomed as a way for us to shore up any weaknesses in our structure – your family, colleagues, friends and associates are after all, also citizens.

GLOBAL CITIZENS ALLIANCE for a sustainable planet

(to join or for further enquiries: mail jonathan.deal@treasurethekaroo.co.za)

Abstract

Sustainability is a word, a term, a concept that has been hi-jacked by commercial interests[1]. A commonly held definition of sustainability, and one that can be reasonably supported by the man in the street is suggested as:

the ability to be sustained, supported, upheld, or confirmed.

The quality of not being harmful to the environment or depleting natural resources, and thereby supporting long-term ecological balance.

To manage the activity of man on the planet in such a way that present generations may meet their reasonable expectations whilst assuring that future generations are not denied the opportunity or ability to meet theirs.

Ergo a sustainable planet implies and embraces all of the actions that humans can think of and cause to be done to adjust the relationship of man and the planet in a way that will enhance and support long-term ecological balance.

No anthropogenic activity is excluded from this initiative. GCA thus is accessible to everyone and belongs to no one.

The concept of a global alliance in environmental fields is certainly not novel. Yet despite the emergence of global communication, easily accessed in most countries by anyone with a computer or smart phone, and the certainty that this planet and all its inhabitants are headed for a brick wall, there is still a yawning chasm in global coordination of the groups and people (citizens) that have understood the need for true sustainability.

Background

My involvement commenced in January 2011 with shale gas mining (fracking/fraccing). It is logical then that I focus on issues related to fossil fuels and energy. Of course, the inescapable fact that every single activity on the planet occurs as a result of the balance of energy on the planet underscores that when one speaks of a sustainable planet no activity can be sidelined or excluded – from farming to concentrated solar power.

Tim Morgan[2], writes “In principle, there is no scientific difference between the energy that we derive from eating a biscuit, the energy we expend when we undertake a physical task, the energy that we put into a car when we fill up its fuel tank, or the energy that we access when we turn on an electric appliance.” Morgan discusses the balance of energy on the planet, how it relates to the economy and how it can be measured in the concept of Energy Return on Energy Invested (EROEI).

Applying the measurement of EROEI to the available forms of energy is a useful and perhaps even indispensable way to measure what a specific fuel source actually returns for the energy that is expended on extracting and refining it, and of course the risk that accompanies its extraction.

Please read on to explore with me some of the issues that must be discussed to develop a sustainable global alliance – for ourselves and future citizens.

[1] Rather than abandoning the term to commercial interests, it is incumbent on civil rights organisations and environmental groupings to put commerce and industry to terms. To insist that the term be reserved for and applied to those activities that truly dovetail with the notion of a sustainable planet.

[3] Action item 1 – who will volunteer from what countries?

Do we need an alliance?

The oil and gas industry (read commerce) is a global giant. The same companies are our threat in every country. They have fought the battle of development-and-profit vs. environment for decades. For them, the planet is borderless, and no land or environment is sacred or out of bounds – and so our alliance has to be borderless too. If we fail to stand together as an international community for a sustainable planet, they will continue to use their immense and increasing power influence with governments to achieve their aims.

To what purpose this alliance?

Realistically speaking, every environment and sustainability-minded group on the planet is chasing the same donor pool. So there is no expectation that a global alliance will produce a global pot of money to fight global battles.

Where the alliance will be strong is in coordinated information, communication and action.

Information

A central point from where, let’s call them sustainable citizens can access data and links to data in any field of human activity – from organic farming to hydroelectric power, from statistics to environmental economics.

The information repository, like Wikipedia, will grow with the submissions of its readers and users.

It is important to emphasize that the development of such a platform will take time, and that the first level of web site will not accommodate such an undertaking. The first site may contain only a document such as this, a list of citizens and organisations who have subscribed to the GCA, and links to existing organisations that have already invested much capital in developing an information repository.

Bearing the concept of EROEI in mind, we too should be mindful of duplicating the expenditure of energy and resources when there is already a perfectly acceptable source available.

Communication and action

Common media platforms (Facebook, Twitter, Google) and of course proprietary email databases facilitate instantaneous communication within the GCA and to the outside world. One of the most powerful tools available to us, especially when facing down the commercial might and geopolitical influence of big business, is the ability to almost instantly:

Name and shame;

Call for product boycott;

Apply pressure to political leaders; and

Inform the general (uninformed) public.

Because of the global nature of many of the corporations and the technology that they wield, the coordinated power of the alliance means that we can coordinate resources (media, financial and social power) to respond to a call for assistance on a specific issue (Monsanto, Tar Sands, Keystone, Fracking New York State, Palm Oil Production, Whaling and so on) within hours – displaying international solidarity and bringing global pressure to governments and corporations.

The internet and media platforms also present the ability for us to communicate as a group with others, and to win supporters with scientific fact and commonsense.

To whom does the alliance belong?

The alliance belongs to everyone and to no one.

Who is in charge of the alliance?

No one is in charge of the alliance – it’s organic, like the Internet. You get out what you put in.

What can the alliance achieve in terms of:

Information – It can facilitate the distribution of source documents to established web sites, so that new members can access the most recent and factual data for distribution and use in their struggle.

News – It can send news of events and incidents to millions of people in a short space of time.

Support – it can harness the global voice of millions of people, at all levels and bring those voices to a small town to get the attention of political leaders and corporations.

Finances – it provides a platform for our fellows to call for urgent financial aid from many people in small amounts to help with funds to fight a specific step – such as an urgent court action.

Why not just start a new organization with a new name and everyone can join that?

Because our strength is in our diversity. It makes us unpredictable.

Because we all have our own organizational and national culture. Trying to force different organizations in different countries to subscribe to the same vision, mission and way of operation will be difficult. For example; an action-oriented organization that is effective in physical demonstrations cannot subscribe to the same action plan as a corporate-focused organization that engages corporations and government through traditional methods – yet both are essential to keep pressure on those who continue to propagate unsustainable practices.

Who can make statements on behalf the alliance?

There is only one statement that can be made on behalf of the alliance, and that is the global statement that everyone and anyone subscribes to. All other statements are made by citizens or organisations individually or on behalf of their own organisation.

It may transpire that a media-relations committee develops to serve the GCA, but this would not speak on behalf of any member organisation and rather issue generic statements of support referencing specific actions or issues that are in the public domain.

No statements or actions that contravene international laws or incite violence or criminal behaviour will be supported by the GCA.

How do we know how many member organizations there are in the alliance and how many individual members there are in each of the members?

We will need a central blog, website or other forum that can be accessed by anyone signing the alliance, either individually or on behalf of an organization. This is the aspect that will require some formal cooperation. It is suggested that a few national groups volunteer to each act as moderators of the chosen forum[3], so that records can be maintained and so that the forum has continuity.

What other information is available on the central site?

The site could have sections with various levels of information, divided into categories such as water, air pollution, economics, waste material, transport issues, bio-diversity, legal issues, a list of allies by region and country, links to specialists who are prepared to help, and so on.

Also presented could be ‘toolkits’ for members to use in their own environment – to inform citizens at all levels and ages.

The site could have clearly posted links to other sites anywhere that such information is available.

Does the alliance receive and control or disburse any money?

The alliance has no formal status and no bank account, owns no assets and cannot commit any or all of its members to anything – its strength is in the diversity and unified spirit of its members and in how much effort they put into growing the alliance over the net and other viral media.

If I join the alliance does it mean that my organization has to work under the alliance?

Absolutely not. The alliance is at all times secondary to the charter, rules, constitution, ethics and any other value of an individual or organization. It is this aspect that allows any one person or organization to join the alliance in a statement of global solidarity without losing their own identity, or being in a position that they are pulled into a specific action without voluntarily joining it.

So what will the alliance be called? And who will choose the name?

This most prickly issue is always emotional. As a start I suggest Global Citizens Alliance with the strapline for a sustainable planet. There will almost certainly be other suggestions, and I am prepared to abandon the work that I have done with the name and logo. Please bear in mind, when thinking of a name:

It must apply to the whole planet

It must fit everyone (individually and collectively)

It must fit every activity – anti-fracking to anti-whaling

It must contain no combination of colors or images that lock it to a specific gender, race, religion or creed.

Is there a suggested statement for the alliance?

Yes. Here is a rough draft. In the spirit of the alliance, all citizens are encouraged to comment, propose changes, additions and so on. For the purposes of making a start on this, Treasure Karoo Action Group (TKAG) – admin@treasurethekaroo.co.za offers to receive and consolidate the first comments. The process can be requested by any other member – it does not belong to TKAG.

Here is a suggested statement in English. You are encouraged to translate it into your own language and all languages can be posted to the central forum that we use.

STATEMENT OF GLOBAL ALLIANCE

In respect of our collective sustainable environment and the rights of future generations

We, the undersigned, do hereby confirm our allegiance and support to each other, in working towards changing the activities of humans from the overwhelmingly destructive current practices to practices that support and foster the concept of sustainability in our common environment.

We are convinced, through scientific and legal data – empirical and peer-reviewed, in the fields of water, air pollution, health, environment and bio-diversity, economics, law, amongst other sciences and disciplines, and through our common sense of right and wrong that most of our energy generation:

Is based and founded on an unsustainable (rapidly depleting) fossil fuel resource;

Ignores the fact that national and global fossil fuel reserves are recorded as being in excess of the value that can actually be consumed (converted to carbon emissions) before the year 2050 with a view to the internationally adopted limit of 2° global warming;

Represents the established contemporary predisposition of the oil and gas industry (O&G) to pursue ‘extreme energy’ options, as easily accessible fossil fuel reserves are exhausted;

Through its marketing by O&G, and in reality, stifles, delays or otherwise militates against the essential development of and investment in ‘green’ energy technologies by governments and corporations;

Locks nations and economies – developed and undeveloped – into a further dependence on fossil fuels;

Displaces otherwise sustainable human activity, impairs the value of the environment and renders less effective – or destroys – the eco-system services, (those systems) which sustain all life on Earth – that are provided by a functioning eco-system;

Creates additional and unplanned expenditure of public funds to restore roads, and maintain public health, conduct investigation, monitor extraction activity, enforce the law, prosecute offenders and generally provide other services from the state with public taxes;

Can and should be disregarded as an energy source on the basis that there exist documented reserves of alternative fossil fuels that are comparable in energy and pollution values, having regard for the global limits that have been reached in respect of the emissions of carbon based fuels and the survival of future generations.

Therefore, it is our position that we shall apply the resources at our disposal to:

Inform the citizens of this planet of the risks to their future prosperity posed by unsustainable practices;

Coordinate and expand, wherever possible and affordable, a global network of persons and organisations opposed to unsustainable practices;

Support each other in whatever way possible and within the credo and objects of our organisation(s) or personal value system(s).

These actions will give effect to our fundamental objective of opposing any activity that promotes or in any way fosters the propagation of unsustainable practices.

Where any commitment to or aspect of this allegiance may be contrary to (any of) the provisions of the member organisations hereto, then that aspect is specifically excluded from this statement of allegiance.

First REIPPP wind farm in commercial operation

Hopefield, Western Cape, 10 February 2014: A major milestone for the South African wind energy industry was reached last week on 1 February 2014 when Hopefield Wind Farm achieved its Commercial Operation Date (COD) – the first REIPPPP wind project to do so.

Situated 5km southeast of Hopefield in the Western Cape, the wind farm comprises 37 wind turbines with an aggregate capacity of 66MW. Construction began in late 2012 and was completed on schedule and to budget.

Umoya Energy (the Cape Town-based owner and developer) was awarded a Power Purchase Agreement (PPA) in Round One of the Department of Energy’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) which is promoting the development of renewable energy projects throughout the country.

Hopefield Wind farm will generate enough electricity to power approximately 70,000 low-income homes or 29,000 medium-income homes. To produce the same amount of electricity, an average South African coal-fired power station would emit approximately 195,000 tons of CO2 every year.

Avoiding these CO2 emissions is equivalent to taking over 40,000 cars off the road.

A significant number of jobs have already been created by the project. During construction phase more than 300 people were employed from the local area alone. In addition, opportunities are being created for local suppliers and service providers, which will continue throughout the project’s 20 year life.

Vestas Southern Africa, supported by key electrical sub-contractors Conco, and civil engineering contractors Power Westland JV, is the EPC contractor responsible for wind turbine supply and wind farm construction, as well as operation and maintenance for the first 15 years. The company has recruited full-time operations personnel in the Western Cape who are undergoing training to operate and maintain this wind farm and others in the region.

The Hopefield Wind Farm Local Community Company (a Section 21 not-for-profit company that owns 5% of the wind farm) will channel Enterprise Development and Socio-Economic Development funding from the project over its 20 year life into the local community and administer various initiatives designed to benefit the community and foster education, particularly in regard to maths and science, the environment and sustainability. The first project to be commenced in 2014 will be to provide insulation improvements and solar geysers to economically disadvantaged families in Hopefield.

Kudos is due to the Department of Environmental Affairs and to the state for the successful prosecution of a company director for environmental damage. This landmark ruling may curtail the frequency of headlines such as this one in the SUNDAY TIMES November 3, 2013:

STATE IGNORES ILLEGAL ZUMA-GUPTA MINING

Director gets jail for land damage

February 10 2014 at 07:45am By Londiwe Buthelezi

sxc.hu

Johannesburg – A landmark judgment sentencing a company director to a prison term for breaking environmental laws has raised the pressure on South African corporates to comply with the law.

A court in Limpopo imposed a prison sentence on Matome Maponya, the managing director of Blue Platinum Ventures, on January 31 for causing environmental degradation. It was the first time in South African history such a ruling was made.

Maponya was sentenced to five years, suspended on condition he rehabilitate the damage, estimated at a cost of R6.8 million, within three months.

Blue Platinum Ventures had been mining clay outside the village of Batlhabine, Limpopo, since 2007, which resulted in environmental degradation.

It was the first time a company director was given a jail term for such a violation, even though legislation has provided for personal liability of directors for breaking environmental laws since 1998.

It has opened the gate for more such rulings. “It is sending a strong message that no one will remain untouched… We are working hard with the law enforcement agencies to ensure that we have more cases going this route in future,” Albi Modise, the spokesman for the Department of Environmental Affairs (DEA), said.

While the department did not want to be seen as upsetting job creation efforts, it wanted private companies to respect the country’s environmental laws like any other laws.

Maponya was not given the option of a fine. In the past, directors found guilty in their personal capacities have only paid fines. “The imprisonment without an option of a fine is likely to change the way companies look at environmental issues,” said Terry Winstanley, a director and national head of the environmental practice at Cliffe Dekker Hofmeyr.

“[Decision makers] will probably give them more weight. Personal liability could arise not just for directors but anyone who has some sort of control over the environmental impacts of a business.”

As a result of this ruling, companies were likely to make greater allocations of financial and human resources to environmental management and compliance, she said.

Shareholder activist Theo Botha said listed companies would note that they needed to attend to environmental matters and not shift the blame.

“There are a lot of cases like the acid water in the West Rand where big companies sold to smaller companies and then there was no one to blame. This will change that. It will create heightened awareness, especially in mining.” Such a ruling was long overdue, he said.

A not-for-profit organisation from Batlhabine, near Tzaneen, brought the illegal mining to the attention of the Department of Mineral Resources in 2010. It did not act, and the organisation laid criminal charges against the six directors of Blue Platinum Ventures. They appeared in the Naphuno Regional Court for the first time in August last year.

People living around Nkomati Anthracite’s operations also had a sweet victory last year when the company, which is 60 percent owned by JSE-listed Sentula Mining, pleaded guilty to transgressing the National Environmental Management Act. It was fined R1 million and agreed to pay R4m to the DEA’s Environmental Management Inspectorate.

“This is something that is welcomed and long overdue specifically within the mining industry,” said Bobby Peek, the director of environmental justice NGO groundWork. “However, there is a legacy staring us in the face, as mining activities that destroy the environment and people’s well-being often go ‘unnoticed’ by the authorities. Mines often operate without the required licences, and acid mine drainage and coal dust continue to be ignored by authorities.

“We need to find ways of stricter enforcement of the law on all mining sectors.” – Business Report

Commenting on the speculation that Minister Edna Molewa has authorised fracking, Jonathan Deal, CEO of TKAG stated that TKAG viewed the Minister’s activity as positive in connection with fracking. “Essentially all that the Minister is saying is that her house is in order when she is required to deal with water use applications in connection with fracking.”

“She cannot authorise fracking exploration. That licence will emanate from the DMR in terms of the MPRDA. We wish that other departments would take a leaf out of Minister Molewa’s book.”

Article rank

4 Sep 2013

The Star Early Edition

Fracking notice placed in Gazette

A NOTICE of intention to declare fracking a controlled activity has been gazetted, Water and Environmental Affairs Minister Edna Molewa said in Pretoria yesterday. “What this means is that fracking becomes a water use, thus requiring a water use licence.”

The notice, in terms of the National Water Act, was gazetted on August 23, and allowed 60 days for public comment. Molewa said objectivity was needed on the issue.

“I would like to be as objective as possible to find the best mechanism that can be applied to take the country forward without damaging water resources,” she said.

Fracking, or hydraulic fracturing, is the process of fracturing rock by a pressurised liquid to extract natural gas from shale rock layers deep within the earth.

When considering licences, Molewa said, only issues around water resources would be considered. “As such, we will take every precaution to ensure that the possible impact of fracking on our water is carefully managed and minimised.”

A year ago, the cabinet agreed to lift the moratorium on applications to explore for shale gas in the Karoo using the fracking method.

The decision was based on recommendations contained in a report on shale gas exploration prepared by a technical task team, Minister in the Presidency Collins Chabane said in September last year.

Last month, Trade and Industry Minister Rob Davies said the government could authorise shale gas exploration before next year’s elections. “Of course we are not going to do this in any kind of irresponsible way,” he said.

“We obviously have to bear in mind all the environmental implications including, of course, the nature of the relationships with any company that gets any kind of permit – what is going to be the delivery in terms of any positive impact on the economy?”

The Alliance Against Fracking in SA said last month it believed the country’s laws were “inadequate to control an industry with a severely tarnished reputation and the process of fracking”.

Treasure Karoo Action Group chairman Jonathan Deal said last month the government had largely relied on research commissioned by the Mineral Resources Department to investigate the potential consequences of fracking. – Sapa